eBay Buys Skype For $2.6 Billion
Published September 14th, 2005
eBay, the world’s leading online auction site, has confirmed that it is buying the industry’s leading VoIP company Skype for $2.6 billion in up-front cash and eBay stock. The company was keen on adding services that make it easier to buy and sell goods online, as it did when it acquired the electronic-payment processing service PayPal in 2002.
Skype has set a new standard in online voice communications with outstanding sound quality and unmatched ease of use. And like eBay, Skype has a fast-growing community - some 54 million Skype users around the world already use their PCs to talk with one another. And best of all, conversations between Skype users via PC are free.
Over time, eBay intends to make voice communications a part of the eBay marketplace - a major step forward in making transactions faster and easier, as well as bringing even more interactivity and humanity to the eBay Community.
eBay is planning to integrate Skype into its auction site to improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain a way to talk to sellers and get the information they need to buy, and sellers can build relationships with customers and close sales. But how many auctioners want to be bothered to interact via voice? Surely the strength of eBay is that its bidders and auctioneers prefer to interact anonymously using e-mail?
The company is also looking at offering a pay-per-call service through Skype. Pay-per-call communications opens up new categories of e-commerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate.
eBay will acquire all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately 2.1 billion euros, or approximately $2.6 billion, which is comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which are subject to certain restrictions on resale.
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